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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Toro Co | NYSE:TTC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.57 | 0.65% | 88.31 | 89.19 | 87.40 | 88.67 | 386,021 | 01:00:00 |
The Toro Company (NYSE: TTC) today reported net earnings of $231.0 million, or $2.06 per share, on a net sales increase of 0.1 percent to $2.392 billion for its fiscal year ended October 31, 2016. In fiscal 2015, the company delivered net earnings of $201.6 million, or $1.78 per share for the year, on net sales of $2.391 billion.
For the fourth quarter, Toro reported net earnings of $30.2 million or $0.27 per share, on a net sales decrease of 2.6 percent to $468.4 million. In the comparable 2015 period, the company posted net earnings of $23.6 million on net sales of $480.8 million.
Shares and per share data have been adjusted for all periods presented to reflect a two-for-one stock split effective September 16, 2016.
The company also announced that its board of directors has declared a quarterly cash dividend of $0.175 per share, a 16.7 percent increase from its previous quarterly dividend rate of $0.15 per share. This dividend is payable on January 12, 2017 to shareholders of record on December 27, 2016. For the fiscal year, the company returned almost $178 million to shareholders through the payment of $65.9 million in dividends and the repurchase of approximately 2.7 million shares of common stock.
“We are pleased to announce record earnings for fiscal 2016, driven by consistent performance and growth in our professional businesses,” said Richard M. Olson, Toro’s president and chief executive officer. “New product introductions across the portfolio were favorably received and we made notable progress in reducing our inventory levels. Despite challenges presented by negative currency conditions and a lack of in-season snowfall, we benefitted from solid demand for our golf equipment and irrigation products and we gained share in those markets. Similarly, we saw increased momentum in our landscape contractor, specialty construction and rental businesses due to the success of new products such as the TITAN® HD zero turn mower and the Dingo® TX 1000.”
“I am proud of our team’s efforts to increase productivity while prudently managing expenses, all of which helped drive our performance,” said Olson. “It is the collective contributions of our engaged employees that make these results possible. I would like to thank our entire team, including our channel partners worldwide. It is their dedication and commitment that helps us achieve these consistent results.”
“With fiscal 2017 already underway, we remain committed to delivering innovative products and serving customers across our businesses. As anticipated, pre-season demand for snow and ice management products was affected by the lack of snowfall last winter. However, mild autumn conditions extended the growing season in several areas, which benefitted our turf maintenance businesses. Recent weather patterns appear promising, and we are encouraged by the resulting retail activity. We will pay careful attention to inventory levels while ensuring we remain responsive to customer demand. As we embark on the last year of our Destination Prime employee initiative, we are committed to growth and profitability, while maintaining focus on working capital management. As always, we recognize that unfavorable weather conditions could negatively impact demand throughout the year, but we will maintain a steady approach in executing on our initiatives in the months ahead.”
For fiscal 2017, the company expects revenue growth to be about 3 to 4 percent, and net earnings to be about $2.20 to $2.26 per share. For the first quarter, the company expects net earnings to be about $0.34 to $0.36 per share.
SEGMENT RESULTS
Professional
Residential
OPERATING RESULTS
Gross margin as a percent of sales for fiscal 2016 was up 160 basis points from last year to 36.6 percent. For the fourth quarter, gross margin as a percent of sales increased 170 basis points to 36.8 percent. For both periods, favorable commodity costs and enhanced productivity, as well as segment mix, contributed to the increases. These increases were partially offset by the impacts of unfavorable currency exchange rates for both the quarter and the fiscal year.
Selling, general and administrative (SG&A) expense as a percent of sales for fiscal 2016 increased 10 basis points to 22.6 percent compared to last year. For the fourth quarter, SG&A expense as a percent of sales increased 10 basis points to 27.5 percent.
Operating earnings as a percent of sales for fiscal 2016 improved 150 basis points from last year to 14.0 percent. For the fourth quarter, operating earnings improved 160 basis points to 9.3 percent of sales.
The effective tax rate for fiscal 2016 was 30.1 percent, compared to 30.7 percent last year. The decrease was due to favorable one-time adjustments and the permanent extension of the domestic research tax credit.
Accounts receivable at the end of fiscal 2016 totaled $163.3 million, down 7.8 percent from last year. Net inventories were $307.0 million, down 8.2 percent from last year. Trade payables were $174.7 million, up 14.9 percent from last year.
About The Toro CompanyThe Toro Company (NYSE: TTC) is a leading worldwide provider of innovative solutions for the outdoor environment, including turf, snow and ground engaging equipment and irrigation and outdoor lighting solutions. With sales of $2.4 billion in fiscal 2016, Toro’s global presence extends to more than 90 countries. Through constant innovation and caring relationships built on trust and integrity, Toro and its family of brands have built a legacy of excellence by helping customers care for golf courses, landscapes, sports fields, public green spaces, commercial and residential properties and agricultural fields. For more information, visit www.thetorocompany.com.
LIVE CONFERENCE CALLDecember 8, 2016 at 10:00 a.m. CSTwww.thetorocompany.com/invest
The Toro Company will conduct its earnings call and webcast for investors beginning at 10:00 a.m. CST on December 8, 2016. The webcast will be available at www.streetevents.com or at www.thetorocompany.com/invest. Webcast participants will need to complete a brief registration form and should allocate extra time before the webcast begins to register and, if necessary, download and install audio software.
Forward-Looking StatementsThis news release contains forward-looking statements, which are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current assumptions and expectations of future events, and often can be identified by words such as “expect,” “strive,” “looking ahead,” “outlook,” “guidance,” “forecast,” “goal,” “optimistic,” “anticipate,” “continue,” “plan,” “estimate,” “project,” “believe,” “should,” “could,” “will,” “would,” “possible,” “may,” “likely,” “intend,” “can,” “seek,” “potential,” “pro forma,” or the negative thereof or similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual events and results to differ materially from those projected or implied. Particular risks and uncertainties that may affect our operating results or financial position include: worldwide economic conditions, including slow or negative growth rates in global and domestic economies and weakened consumer confidence; disruption at our manufacturing or distribution facilities, including drug cartel-related violence affecting our maquiladora operations in Juarez, Mexico; fluctuations in the cost and availability of raw materials and components, including steel, engines, hydraulics and resins; the impact of abnormal weather patterns, including unfavorable weather conditions exacerbated by global climate change or otherwise; the impact of natural disasters and global pandemics; the level of growth or contraction in our key markets; government and municipal revenue, budget and spending levels; dependence on The Home Depot as a customer for our residential business; elimination of shelf space for our products at dealers or retailers; inventory adjustments or changes in purchasing patterns by our customers; our ability to develop and achieve market acceptance for new products; increased competition; the risks attendant to international operations and markets, including political, economic and/or social instability, tax and trade policies in the countries in which we manufacture or sell our products, and implications of the United Kingdom’s vote to exit the European Union; foreign currency exchange rate fluctuations; our relationships with our distribution channel partners, including the financial viability of our distributors and dealers; risks associated with acquisitions; management of our alliances or joint ventures, including Red Iron Acceptance, LLC; the costs and effects of enactment of, changes in and compliance with laws, regulations and standards, including those relating to consumer product safety, conflict mineral disclosure, taxation, trade and tariffs, healthcare, and environmental, health and safety matters; unforeseen product quality problems; loss of or changes in executive management or key employees; the occurrence of litigation or claims, including those involving intellectual property or product liability matters; and other risks and uncertainties described in our most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.
THE TORO COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (Unaudited) (Dollars and shares in thousands, except per-share data) Three Months Ended Fiscal Years Ended October 31, October 31, October 31, October 31, 2016 2015 2016 2015 Net sales $ 468,356 $ 480,807 $ 2,392,175 $ 2,390,875 Gross profit 172,137 168,574 874,595 835,935 Gross profit percent 36.8 % 35.1 % 36.6 % 35.0 % Selling, general, and administrative expense 128,623 131,742 540,199 536,821 Operating earnings 43,514 36,832 334,396 299,114 Interest expense (5,315 ) (4,686 ) (19,336 ) (18,757 ) Other income, net 3,535 3,159 15,400 10,674 Earnings before income taxes 41,734 35,305 330,460 291,031 Provision for income taxes 11,504 11,751 99,466 89,440 Net earnings $ 30,230 $ 23,554 $ 230,994 $ 201,591 Basic net earnings per share of common stock $ 0.28 $ 0.21 $ 2.10 $ 1.81 Diluted net earnings per share of common stock $ 0.27 $ 0.21 $ 2.06 $ 1.78 Weighted-average number of shares of common stock outstanding – Basic 109,546 110,099 109,834 111,130 Weighted-average number of shares of common stock outstanding – Diluted 111,667 112,587 111,987 113,514 Shares and per share data have been adjusted for all periods presented to reflect a two-for-one stock split effective September 16, 2016. Segment Data (Unaudited) (Dollars in thousands) Three Months Ended Fiscal Years Ended October 31, October 31, October 31, October 31, Segment Net Sales 2016 2015 2016 2015 Professional $ 343,483 $ 325,185 $ 1,705,312 $ 1,639,659 Residential 118,801 147,095 669,131 725,682 Other 6,072 8,527 17,732 25,534 Total* $ 468,356 $ 480,807 $ 2,392,175 $ 2,390,875 *Includes international sales of: $ 129,011 $ 135,724 $ 579,588 $ 610,635 Three Months Ended Fiscal Years Ended October 31, October 31, October 31, October 31, Segment Earnings (Loss) Before Income Taxes 2016 2015 2016 2015 Professional $ 59,749 $ 49,283 $ 352,060 $ 308,010 Residential 9,197 15,825 73,691 84,956 Other (27,212 ) (29,803 ) (95,291 ) (101,935 ) Total $ 41,734 $ 35,305 $ 330,460 $ 291,031 THE TORO COMPANY AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) October 31, October 31, 2016 2015ASSETS
Cash and cash equivalents $ 273,555 $ 126,275 Receivables, net 163,265 177,013 Inventories, net 307,034 334,514 Prepaid expenses and other current assets 35,155 34,782 Total current assets 779,009 672,584 Property, plant, and equipment, net 222,038 224,995 Long-term deferred income taxes 57,228 66,663 Goodwill and other assets, net 329,243 339,416 Total assets $ 1,387,518 $ 1,303,658LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 22,484 $ 23,134 Short-term debt — 222 Accounts payable 174,668 152,017 Accrued liabilities 266,687 268,361 Total current liabilities 463,839 443,734 Long-term debt, less current portion 331,423 354,818 Deferred revenue 11,830 11,365 Other long-term liabilities 30,391 31,576 Total stockholders' equity 550,035 462,165 Total liabilities and stockholders' equity $ 1,387,518 $ 1,303,658 THE TORO COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Fiscal Years Ended October 31, October 31, 2016 2015 Cash flows from operating activities: Net earnings $ 230,994 $ 201,591 Adjustments to reconcile net earnings to net cash provided by operating activities: Non-cash income from finance affiliate (9,588 ) (8,353 ) Provision for depreciation, amortization, and impairment loss 64,097 63,143 Stock-based compensation expense 10,637 10,836 Decrease in deferred income taxes 10,075 200 Other (464 ) (128 ) Changes in operating assets and liabilities, net of effect of acquisitions: Receivables, net 15,785 (25,647 ) Inventories, net 23,192 (52,656 ) Prepaid expenses and other assets (905 ) (607 ) Accounts payable, accrued liabilities, deferred revenue, and other long-term liabilities 18,119 48,490 Net cash provided by/(used in) operating activities 361,942 236,869 Cash flows from investing activities: Purchases of property, plant, and equipment (50,723 ) (56,374 ) Proceeds from asset disposals 310 179 Distributions from finance affiliate, net 9,848 4,264 Proceeds from sale of a business 1,500 — Acquisition, net of cash acquired — (198,329 ) Net cash provided by/(used in) investing activities (39,065 ) (250,260 ) Cash flows from financing activities: Repayments of short-term debt (1,161 ) (21,283 ) Repayments of long-term debt (24,107 ) (7,227 ) Excess tax benefits from stock-based awards 12,495 8,459 Proceeds from exercise of stock options 20,226 9,203 Purchases of Toro common stock (111,999 ) (106,964 ) Dividends paid on Toro common stock (65,890 ) (55,549 ) Net cash provided by/(used in) financing activities (170,436 ) (173,361 ) Effect of exchange rates on cash and cash equivalents (5,161 ) (1,846 ) Net increase/(decrease) in cash and cash equivalents 147,280 (188,598 ) Cash and cash equivalents as of the beginning of the fiscal period 126,275 314,873 Cash and cash equivalents as of the end of the fiscal period $ 273,555 $ 126,275
View source version on businesswire.com: http://www.businesswire.com/news/home/20161208005195/en/
The Toro CompanyInvestor RelationsHeather Hille, 952-887-8923Director, Investor Relationsheather.hille@toro.comorMedia RelationsBranden Happel, 952-887-8930Senior Manager, Public Relationsbranden.happel@toro.com
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